Five Stocks Trading Higher Amid Positive News

The US stock markets have opened on a positive note today and keep trading in the green amid several interesting M&A deals.

Major indices are showing marginal gains as Allergan plc Ordinary Shares (NYSE:AGN) announced its acquisition of Vitae Pharmaceuticals Inc (NASDAQ:VTAE), while Mattress Firm Holding Corp (NASDAQ:MFRM) also reported the completion of a tender offer from Steinhoff International. In this article, we will take a closer look at these and other developments and will analyze the smart money sentiment towards the stocks in question.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

violetkaipa/Shutterstock.com

Shire PLC (ADR) (NASDAQ:SHPG) has reported the approval of its CUVITRU™ drug in adult and children over two years old by the US FDA. The drug is designed for treating patients with primary immunodeficiency. This condition affects up to six million people globally. With this approval, Shire now has the broadest portfolio of subcutaneous immunolglobulin (IG) and intravenous products, the company said in a statement. The treatment is already approved in Europe. A total of 64 of the funds we track hold about $3.77 billion of Shire PLC shares as of the end of June, up from 49 funds with stakes worth $2.57 billion at the end of March.

Mattress Firm Holding Corp (NASDAQ:MFRM) has just announced the successful completion of the tender offer proposed by Steinhoff International Holdings N.V, which involved the acquisition of 67.36% of Mattress Firm’s stock at $64.00 a share. Steinhoff, an integrated retailer that manufactures, sources and retails furniture and household goods, entered into an agreement to acquire Mattress Firm Holding Corp (NASDAQ:MFRM) back in August. A total of 15 funds we track amassed about $349 million worth of Mattress Firm shares at the end of June, down from 18 funds holding $459 million worth of stock a quarter earlier.

Stryker Corporation (NYSE:SYK) is in spotlight in connection with its acquisition of Restore Surgical LLC, d/b/a Instratek, a privately-held business based out of Houston, Texas, which deals with staple and hammertoe implants and minimally invasive soft tissue recession instrumentation. The parties are expected to complete the acquisition in the fourth quarter of 2016, pending customary closing conditions, but the value of the deal was not disclosed. Heading into the third quarter 22 investors from our database had positions in Stryker Corporation with a total value of about $532 million.

As stated earlier, Allergan plc Ordinary Shares (NYSE:AGN) has acquired Vitae Pharmaceuticals Inc (NASDAQ:VTAE) for $639 million, which values Vitae’s stock at $21 apiece, which represents a 160% premium to Vitae’s closing price on Monday. On the back of the news, Vitae shares have surged by around 158%. Allergan stated that the deal will boost its dermatology portfolio, especially with the acquisition of Vitae Pharmaceuticals Inc (NASDAQ:VTAE)’s oral psoriasis drug. Allergan plc Ordinary Shares (NYSE:AGN) will also gain access to Vitae’s atopic dermatitis drug called VTP-38543, which is a topical Liver X receptor beta selective agonist. The deal is expected to close by the end of 2016, pending regulatory approval.

The number of funds from our database long Allergan plc Ordinary Shares (NYSE:AGN) declined to 131 from 170 during the second quarter, while the total value of their holdings also decreased to $13 billion from $20 billion. At the same time, 12 funds reported stakes in Vitae worth $107 million as of the end of June, compared to 18 funds holding $82 million worth of shares a quarter earlier.

Disclosure – none